Sydney, Feb 20, 2026, 18:15 AEDT — The market has closed.
- Santos shares slipped roughly 0.9% to finish at A$6.94, following news of a long-term South Australia gas supply term sheet.
- Under the deal, 200 petajoules of gas are lined up for delivery over a decade starting in 2030, all aimed at backing Whyalla Steelworks’ move toward lower-emissions production.
- Investors are eyeing the new contract, Santos’ cost-cut push, and a looming ex-dividend date as next week approaches.
Santos Ltd dropped 0.9% to A$6.94 by Friday’s close, after the Australian gas group confirmed it had nailed down key terms with the South Australian government for a decade-long gas supply deal, linked to the Whyalla Steelworks overhaul. According to Santos, the binding term sheet sets out 200 petajoules (PJ) of gas starting in 2030. The parties are working toward a full supply agreement by June 30.
A petajoule measures energy. According to Santos, the contract locks in a volume equal to about 30% of the company’s current Cooper Basin gas output—raising questions in the market about how much domestic supply is being committed to long-term industrial customers. Chief executive Kevin Gallagher said the gas will support Whyalla’s rollout of direct reduced iron tech, enabling emissions cuts of around 50% compared to its older coal-powered blast furnace.
Timing is key here. Santos has ramped up its focus on costs and cash flow this week, reporting an underlying net profit after tax of $898 million for 2025. Revenue hit $4.9 billion, with free cash flow at $1.8 billion. The company’s also going after a roughly 10% headcount cut. It’s aiming for first cargo from Barossa LNG and the Darwin LNG life extension in early 2026.
Pressure from analysts for more details on Santos’s undeveloped assets keeps building. “The market is currently putting zero value on these assets,” said Dale Koenders, Barrenjoey’s head of energy research, in comments to Reuters this week, after Santos announced a strategic review of its Australian integrated oil and gas portfolio. Jarden analysts noted the planned headcount reduction should appeal to investors as a sign that operating costs are set to fall. Reuters
The broader market barely budged Friday, the S&P/ASX 200 dipping just 4.8 points to close at 9,081.4. Energy names fared better. Woodside Energy climbed 1.2% during the session.
Oil held firm, with Brent climbing 0.4% to $71.91 a barrel and U.S. WTI ticking up 0.5% to $66.74. Traders factored in rising geopolitical risk tied to U.S.-Iran tensions, according to Reuters.
Santos’ final dividend is now on the table: US$0.103 per share, with the ex-dividend date landing on Feb. 23, and the record date the following day, Feb. 24. Payment is set for March 25. Investors waiting on the Australian dollar equivalent will get that figure on March 3, according to the company’s notice.
Santos is set for a board shakeup. Director Yasmin Allen will step down on Feb. 21, wrapping up ten years with the company—the last stretch spent as chair of the people, remuneration and culture committee, according to the company.
The gas deal doesn’t kick in until 2030, making it tough for investors to gauge what it’s really worth right now. Shifting gas policy, project delays, and the fast-moving commodity market only add to the uncertainty.
Heading into Monday’s ex-dividend trade, traders are set to see if the stock can maintain its footing. Eyes will also be on broker notes and any fresh management remarks for signs that questions about costs and the portfolio review are starting to hit the tape.
